Kraken cryptocurrency exchange on January 5 released a transparency report on Twitter showing the volume of law enforcement requests that have been received globally. These are requests made for the transaction data of certain users of the exchange. Out of several countries around the world, the highest number of requests has come from the US notably the FBI, DEA, and HSI.
More Law Enforcement Requests on a Yearly Basis
The infographic provided by Kraken’s Compliance team gives the impression that it is not uncommon to receive such requests from countries, but of late, it has been on the increase. From 39 in 2015, 71 in 2016, 160 in 2017, and then 475 in 2018. This shows that there has been a lot of concerns of recent on the operation of users of this crypto exchange.
Asides from the trend during the past few years, the San Francisco-based exchange has also narrowed it down to countries where most of the requests were received. In accordance, the US is at the top with 315 requests having been made. The country is then closely followed by the UK (61), Germany (34), France (20), Spain (7), and Czech (5).
A closer look at this information reveals that the US has made more requests to receive all transactions data about certain individuals. These were mostly made by law agencies such as the Homeland Security Investigations, FBI, Drug Enforcement Administration, among others. However, the CIA and NSA were not among those who had made these requests which Kraken confirms that they already have the data.
U.S. Enforcement Discourages Cryptocurrency Companies
That being the case, Kraken has added that this is why most cryptocurrency exchanges do not allow US citizens on its platform. The exchange also attributed this to the cost of handling subpoenas which discourages potential business applicants. Therefore, this puts a lot of pressure on current operators while also discouraging investors.
TokenPay for Instance, a cryptocurrency platform attested to the fact that they had blocked US citizens from partaking in their Initial Coin Offering (ICO). They also added that these users were prevented from downloading their mobile wallets for Android and iOS smartphones. In their opinion, it is better to take these preventive measures than risk the security of its platform.
The US to Protect Consumers and Investors in the Crypto Industry
On the other hand, the US is tightening its controls to ensure the highest level of consumer and investor protection and also keep track of money laundering. This can be attributed to the fact that this is a market which the Securities and Exchange Commission (SEC) seeks to regulate to ensure that the market is safe and consumers can trust companies they invest in.